U.S. derivatives regulators are set to make their first financial reward to a whistleblower.
The unnamed whistleblower will receive approximately US$240,000 in exchange for providing regulators with information on rule violations.
The U.S. Commodity Futures Trading Commission’s (CFTC) said Tuesday that the agency will make its first award to a whistleblower under a program that was created as part of the Dodd-Frank reforms.
“Here, the whistleblower provided specific, timely and credible information that led to the commission bringing important enforcement actions,” said acting director of the CFTC’s enforcement division, Gretchen Lowe; adding, “The CFTC’s Whistleblower Program is attracting high-quality tips and cooperation we might not otherwise receive and is already having an impact on the commission’s enforcement mission.”
The CFTC’s new whistleblower program provides monetary awards to individuals who report violations of the Commodity Exchange Act if the information leads us to an action that results in more than US$1 million in monetary sanctions. Whistleblowers are eligible for between 10% and 30% of the penalties collected. The CFTC can also pay awards based on monetary sanctions collected by other authorities in actions that are based on information provided by a CFTC whistleblower. It also prohibits retaliation by employers against employees who provide information about possible violations, or who assist the regulator in an investigation or proceeding based on their information.
Christopher Ehrman, the director of the CFTC’s whistleblower office, said that the number of high quality tips, complaints and referrals received continues to increase. “Our whistleblower program is a necessary enforcement tool for the agency, and my hope is that this award will send the strong message that the CFTC will pay for information that helps us do our jobs.”